Ignoring mental health issues in Malaysia could cost up to RM34 billion in productivity losses by 2030
 
 

Kuala Lumpur, 18 May 2026 – Mental health conditions are a major but often underestimated economic risk. Their impact is felt long before it shows up in health systems or public budgets. In some countries, around one in three working-age adults are projected to be living with mental health conditions by 2030, with overall productivity impacts approaching 5% of GDP.

The Value of Mental Health by Zurich Insurance Group (Zurich), shows that the biggest costs of mental illness often sit outside formal protection systems. Across six countries analysed – Australia, Chile, Germany, Malaysia, the United Arab Emirates and the United Kingdom – the burden falls heavily on individuals, families and employers, through losses in wellbeing and productivity that can far exceed official mental health spending. This is also reflected locally, where more than 4 million people could be living with mental health conditions by 2030, with productivity losses projected to reach RM34 billion, equivalent to 1.4% of GDP.

“As mental health challenges increasingly impact economies at a structural level, it’s essential for companies to play their part in building resilient protection systems. In our experience, around one-third of our customers’ employees who receive early support through Zurich’s rehabilitation services can stay in work, rather than leaving the workforce altogether. That is why business leaders should act sooner – to prevent early distress from turning into long-term workforce and social disengagement,” says Alison Martin, CEO Life, Health and Bank Distribution.

“In Malaysia, mental illness is still something many people try to manage quietly. Many wait until the impact has become too difficult to ignore. Earlier intervention makes a real difference – helping people stay connected to work, family, and daily life,” says Lee Han Boon, Chief Proposition Management Officer (Life Segment) of Zurich Malaysia.

A burden felt first by people and families

Across the countries examined, people living with mental health conditions are projected to lose between 60 and 67 days of healthy life each year. At national level, this amounts to 0.3 to 2.9 million years of healthy life lost annually per country, accounting for about 7% to 14% of overall wellbeing losses across all causes. This burden is comparable to that of all cancers combined (around 6% to 19%) in most countries. Locally, the average person living with a mental health condition could lose 62.5 days of healthy life each year by 2030, while the wider wellbeing impact is projected to reach nearly RM109 billion.

When formal systems struggle to respond early, care increasingly shifts to families and communities. Depending on the country, this can mean up to 1,275 hours of informal care per year, a substantial but mostly invisible burden that rarely appears in official statistics. The private burden is especially visible in Malaysia, with families and caregivers projected to provide more than 123 million hours of unpaid mental health-related care by 2030, equivalent to around RM3 billion in informal care value.

The widening employment gap  

The largest economic impacts are not driven by short‑term sick leave, but by a widening employment gap – the difference in employment rates between people with a mental health condition and those without. Across countries, people living with mental health conditions are significantly less likely to be in employment as they leave jobs, struggle to return, or never enter the workforce in the first place.

This gap is particularly pronounced where mental health challenges emerge earlier in life. In several countries, conditions are increasingly identified before or at the point of labour market entry, increasing the risk that early distress disrupts first jobs, skills formation and long-term attachment to work. In some countries, the employment gap is as high as 29%. Meanwhile, Malaysians with a mental health condition are estimated to be 18% less likely to be employed than those without, with employment rates of 56% compared with 74%.

As automation and AI reshape entry routes into work – reducing routine roles and raising skill requirements – these pressures are expected to intensify. This makes early support, adaptable pathways and resilience at key career transitions increasingly critical to prevent temporary distress from becoming lasting labour market disengagement. That challenge is particularly relevant locally, where labour market disengagement accounts for 95% of total productivity losses linked to mental health conditions.

Earlier action matters

Across labour markets, the pattern is clear: awareness is growing, but support often comes too late – after distress has already translated into impaired functioning, absence or disengagement. By then, the costs extend well beyond health systems, falling on individuals, families and employers.

The report points to a clear opportunity to act earlier. This includes faster access and better triage, practical stay‑at‑work and return‑to‑work pathways, as well as reducing the silent shift of pressure onto households and workplaces when formal support fails. In Malaysia, that need is reinforced by the fact that up to four in five people with a mental disorder may not be accessing professional care, while 42% of treatment costs are projected to be paid out of pocket.

Across countries and models, the message is consistent: earlier action prevents short‑term distress from turning into long‑term disengagement, while protecting wellbeing, participation and resilience at the same time. This is especially important in the local context, where support is still often sought only after symptoms have become more serious, contributing to a heavier burden on households, workplaces and the wider economy.

Key findings at a glance

• In higher‑visibility markets, prevalence is rising fast, with around one in three working‑age adults affected in Australia and the UK by 2030; by comparison, more than 4 million people in Malaysia, around 12% of the population, could be living with mental health conditions by 2030.
• People with mental health conditions lose around two months of healthy life each year (60–67 days), with the corresponding estimate for Malaysia is 62.5 days annually.
• This amounts to 0.3–2.9 million healthy life years lost annually per country, accounting for about 7% to 14% of overall wellbeing losses across all causes. In Malaysia, mental health conditions and self-harm are projected to account for nearly RM109 billion in wellbeing losses by 2030.
• Across the six markets, the total wellbeing cost approaches USD1 trillion annually (USD24bn–403bn per market).
• In some countries, wellbeing losses are up to 49 times higher than formal mental health spending. By 2030, Malaysia’s total mental health-related expenditure is estimated to rise to nearly RM3 billion, representing about 0.1% of GDP.
• Productivity losses could approach 5% of GDP by 2030, driven mainly by people dropping out of the workforce. Locally, these losses are projected to reach RM34 billion by 2030, equivalent to 1.4% of GDP.
• Families and individuals carry a large share of the burden, with out‑of‑pocket costs covering up to 43% of treatment and up to 1,275 hours of unpaid care per year. While in Malaysia, 42% of treatment costs are projected to be paid out of pocket, while families and caregivers are expected to provide more than 123 million hours of unpaid mental health-related care by 2030.

The Value of Mental Health report analyses public data to assess the current and future impact of mental health conditions in Australia, Chile, Germany, Malaysia, UAE and the UK, representing emerging and developed markets. The report measures effects on people, productivity, and protection systems through 2030, using metrics like years of healthy life lost, workforce participation gaps and system-level costs.